Definition ∞ Tokenized Commercial Money refers to digital representations of commercial bank deposits issued on a distributed ledger. These tokens are backed by actual fiat currency held in bank accounts and aim to provide the benefits of blockchain technology, such as instant settlement and programmability, within a regulated financial framework. They bridge traditional banking with digital asset capabilities.
Context ∞ Tokenized Commercial Money is a significant area of development in the financial sector, particularly as central banks explore digital currencies and wholesale settlement solutions. Discussions often focus on its potential to enhance interbank payments and collateral management, offering a regulated alternative to other digital assets. Observing pilot projects and regulatory stances from financial authorities provides insight into its future adoption and impact.
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